The government's advisers on medicine knew that patients were at risk of contracting Aids from imported blood products as early as 1983, but ruled against a ban because of fears it would cause a shortage of supply.

Minutes obtained by the Guardian of a meeting held on July 13 1983 reveal that the Committee on Safety of Medicines (CSM) knew that "patients who repeatedly receive blood clotting-factor concentrates appear to be at risk" of Aids.

They also knew that the risks were highest if the blood products came "from the blood of homosexual and IV drug users in areas of high incidence - eg New York and California" and for those who repeatedly received high doses of the blood plasma products. Despite this, the committee ruled that the risk of contracting Aids had to be balanced against the "life-saving" benefits of their use to haemophiliacs. They also argued that withdrawing the blood products was "not feasible on the grounds of supply".

British patients with the rare inherited condition in which blood does not clot normally were not told of the risks. Critics say they would have preferred to carry on receiving their previous treatment, called cryoprecipitate, manufactured in the UK from single donors, even though it meant going to hospital.

Nearly 5,000 people were infected with hepatitis C; of these 1,200 contracted HIV after receiving the imported plasma product in the late 70s and early to mid-80s.

A total of 1,757 patients have died and many are terminally ill following a scandal that the Labour peer Lord Winston has dubbed "the worst treatment disaster in the history of the NHS".

The revelations are contained in documents obtained by campaigners as part of the public inquiry into the haemophilia affair, which took emotional evidence from victims yesterday.

The minutes conclude: "The possibility was considered of withdrawing US preparations from the UK. It was concluded that this is not at present feasible on grounds of supply. Moreover, the perceived level of risk does not at present justify serious consideration of such a solution."

However, it argued that the UK should become self-sufficient in blood concentrates - something the former Labour health minister David (now Lord) Owen, had pledged would happen by 1977.

The plasma, called Factor VIII, was made from blood from 10,000 paid donors, many of whom were prisoners or vagrants, who, by 1975, were known to carry a greater risk of having hepatitis C.

The decision to continue using the US plasma product came despite the committee being warned of the growing link between it, Aids and haemophiliacs by the scientist charged with assessing the spread of such diseases.

In a letter to the Department of Health and Social Security dated May 9 1983, Dr Spence Galbraith, the head of the communicable disease surveillance centre at the Public Health Laboratory Service, warned that, since there had been 14 cases of haemophiliacs contracting Aids after receiving Factor VIII concentrate - including one in Cardiff - US blood products made in the affected period should be withdrawn.

Dr Galbraith added: "I have reviewed the literature and come to the conclusion that all blood products made from blood donated in the US after 1978 should be withdrawn from use until the risk of Aids transmission by these products has been clarified."

Dr Galbraith gave expert evidence at the July 13 meeting, of a subcommittee of the CSM, where his advice to withdraw imported blood products was considered but ruled out. The subcommittee, chaired by Dr (later Sir) Joseph Smith also received a scientific paper on Aids that warned: "It is hoped there is no 'ticking time bomb' for haemophiliacs."

Last night Sir Joseph said: "The subcommittee faced the difficult decision of weighing the relatively uncertain risk of contamination from imported blood products against the serious risk of harm to patients with haemophilia should there be a shortage of the products. The conclusions reached were considered and agreed by the CSM.

"At that time the need for blood products for the treatment of haemophilia patients far outstripped the supply of the material produced in the UK. The subcommittee wanted the UK to produce enough material as soon as possible so that import would no longer be required. The need for research into Aids was also strongly supported, including the development of heat treatment to counter the risk of infection.

"It remains a great tragedy that many people contracted blood-borne diseases from contaminated materials ... The subcommittee's conclusions were based on the best available evidence at the time, balancing what was known of the risks and benefits of current treatment options to patients living with a life-threatening condition."

The government has always insisted treatment was given in "good faith" and that it did not understand the danger.

Carol Grayson, whose husband Peter Longstaff died in April 2005 after contracting Aids and hepatitis C, and who now heads the campaign group Haemophilia Action UK, said: "The minutes ... clearly demonstrate that the safety warnings regarding Aids laid out by Dr Galbraith ... were ignored by both the government and members of the medical profession.

"In 1983, the government and medical profession brushed aside the fact that haemophiliacs were dying from Aids. The alarm bells should have been ringing.

"Dr Galbraith had already identified that the US treatment came from large plasma pools and that there was a high risk that the products were contaminated with Aids because of the type of donor used. But those responsible for patient safety at the CSM meeting decided that 'the benefits of this treatment outweighed the risk' and in doing so condemned many patients to a death sentence."

Roddy Morrison, chair of the Haemophilia Society, said: "The evidence of the risks was clearly known and I feel absolute anger and a degree of incredulity that this decision could have been made. This decision meant a preventable infection was not prevented - and impacted on people in the ultimate way."

Jenny Willott, the Liberal Democrat MP who has campaigned on the issue, said: "The more documents that come out, the more clear it becomes that people did know there was a quite severe risk - and they needed to tell people who were affected. I have constituents who contracted HIV and hepatitis and who had very mild haemophilia. Under no circumstances would they have taken anything to put them at risk."

At the public inquiry in central London yesterday, one victim accused successive governments of "a disgraceful cover-up". Another, haemophiliac Andrew Evans, 30, told the hearing he had been living with HIV for 25 years. His parents were told of his HIV status when he was 10; the information was kept from him until he was 13, when he began to display symptoms of immune deficiency.